Dallas, Texas 12/26/2013 (FINANCIALSTRENDS) – IAMGOLD Corp (USA) (NYSE:IAG) Sinks Further As Gold Price Hits 36 Month Low
IAMGOLD Corp (USA) (NYSE:IAG) shares have been traded at discounted prices by its investors as the precious metal price has hit the lowest price it was traded at in the past three years. During trading on December 19 the price of gold recorded was lowest in the past 36 months at $1193.6 per ounce. On the international price of gold dropping below the $1200 per ounce bench mark, the markets reacted pretty negatively by exiting from the various gold mining firm stock. The price of gold this year has slid down by 29 percent and has had a direct impact on the prospects of Gold mining firms.
Gold Mining firms have been struggling to take this dip in gold price in their stride. The mining firms have been severely hit with drop in their earnings, as the cost of production of Gold has gone up at the same time when the price of gold in the international markets has been under pressure. In addition the recent tapering of federal stimulus package also has added to pressure on the price of gold. Hence the gold mining firms have been forced to implement various costs cutting measure to tide over the situation. These measures include reduction in production by temporarily shutting down less productive mines and cutting down staff. They have also tried to bring out efficiencies in their operations by cutting down cap ex and going slow on new mines development. Mining firms including IAMGOLD Corp (USA) (NYSE:IAG) have been forced to cut down dividend payout plans for their share holders in order to cut down expenses. These are some of the major reasons why IAMGOLD Corp (USA) (NYSE:IAG) is struggling to hold on to its investors.
Stock Performance
The $1.23 billion market capped IAMGOLD Corp (USA) (NYSE:IAG) has been at the receiving end of investor push back right trough this calendar year. In the past 30 days the stock has shed close to 22.88 percent of its market value during trading. This has been a one off situation and the stock has seen its market value plummet by a big 68 percent in its past one year of trading. At close of business during trading yesterday, the stock was trading 71 percent down from its prior 52 week high price points. It is trading very close to its prior 52 week low price point of $3.15 per share. The close price on December 24 was $3.27 per share.
Competitive Analysis
IAMGOLD Corp (USA) (NYSE:IAG) is not the only stock which is struggling to keep its investors stake from deteriorating further. As indicated in the chart below, the peers of this gold mining firm like AngloGold Ashanti Limited (ADR)(NYSE:AU) ,Taseko Mines Limited (USA)(NYSEMKT:TGB),Nevsun Resources (USA)(NYSEMKT:NSU),Golden Star Resources Ltd. (USA)(NYSEMKT:GSS) are also struggling to regain investor interest over the past one year. In fact the Toronto based IAMGOLD Corp (USA) (NYSE:IAG) has performed better than some of its competition over the past one year.
Operations Spread Across South America and Canada
IAMGOLD Corp (USA) (NYSE:IAG) has its core operations centred around its five gold mines and attendant diamond and niobium mines which are spread across Africa and America continents. Of its above mining properties, its operating/production mines are “Rosebel Gold Mine, Essakane Gold Mine, Doyon Division Gold Mines and Niobec Niobium Mine”. Parallely, the mining firm is attempting to develop its existing mining properties in “Westwood Project, Quimsacocha Project and Camp Caiman Project”.
